How to pay the balloon payment at the end of car finance PCP

quickoldfart

Finally we are getting somewhere,

Forget that it was my choice to squander my money on a new car (I am perfectly happy with that choice)
Disregard any preconceptions you have about me or my ability to afford any future loan.(I can)
Forget options of selling it now and buying an old banger (not my style)

Facts.
I AM keeping the car for now
I am simply looking into the best way to do so?

I have spoken with VW finance and they cannot really offer much so that is out.
A Money Transfer Card at 0% may have been an option but I they will not tell you how much you are likely to be allowed to put on it without applying (I think £10k is probably pushing it).
Which in reality leaves a bank loan, (over 4 years to maintain the comfortable monthly repayment) which will probably incur a 1-2 month interest early settlement fee.

Unless anyone has any other ideas?

DrEskimo

Do you have any savings you can use towards the payment?

That would help reduce the amount you need on credit and make the balance transfer option more feasible.

quickoldfart

DrEskimo said:

Do you have any savings you can use towards the payment?

That would help reduce the amount you need on credit and make the balance transfer option more feasible.

Unfortunately not, we spent a lot of money on this house, expecting to reimburse our savings pot once the flat sold, otherwise I possibly would have simply paid it off in full

DrEskimo

quickoldfart said:

DrEskimo said:

Do you have any savings you can use towards the payment?

That would help reduce the amount you need on credit and make the balance transfer option more feasible.

Unfortunately not, we spent a lot of money on this house, expecting to reimburse our savings pot once the flat sold, otherwise I possibly would have simply paid it off in full

I would go with the loan then. 

I would advise against the BT card even if you did get the full amount. The longest period I know of is Sainsbury's 29month, and that would push your monthly to £345.

If you stuck to the £240 payment on the hope you could settle it sooner, but then weren't able to (best laid plans of mice and men...) then you would be looking at a much higher APR after that introductory period. You could apply for another 0% deal, but there are no guarantees you would get this.

foxy-stoat

DrEskimo said:

quickoldfart said:

DrEskimo said:

Do you have any savings you can use towards the payment?

That would help reduce the amount you need on credit and make the balance transfer option more feasible.

Unfortunately not, we spent a lot of money on this house, expecting to reimburse our savings pot once the flat sold, otherwise I possibly would have simply paid it off in full

I would go with the loan then. 

I would advise against the BT card even if you did get the full amount. The longest period I know of is Sainsbury's 29month, and that would push your monthly to £345.

If you stuck to the £240 payment on the hope you could settle it sooner, but then weren't able to (best laid plans of mice and men...) then you would be looking at a much higher APR after that introductory period. You could apply for another 0% deal, but there are no guarantees you would get this.

Nope, I have MT deals at the moment on Halifax & Lloyds, 3% fee and 0% over 18 months repayments should be 1%.
So it would cost me £300 to float £10,000 for a year and a half paying £100 a month for a minimum.  If my plan was to clear the finance on the sale of a property then that would be cheapest and easiest way for me, without applying for any more credit and being given a high rate.
Barclaycard and HSBC have similar deals but their repayment percentages are 2.25% from memory. 

So what cards has the OP got, any?

DrEskimo

foxy-stoat said:

DrEskimo said:

quickoldfart said:

DrEskimo said:

Do you have any savings you can use towards the payment?

That would help reduce the amount you need on credit and make the balance transfer option more feasible.

Unfortunately not, we spent a lot of money on this house, expecting to reimburse our savings pot once the flat sold, otherwise I possibly would have simply paid it off in full

I would go with the loan then. 

I would advise against the BT card even if you did get the full amount. The longest period I know of is Sainsbury's 29month, and that would push your monthly to £345.

If you stuck to the £240 payment on the hope you could settle it sooner, but then weren't able to (best laid plans of mice and men...) then you would be looking at a much higher APR after that introductory period. You could apply for another 0% deal, but there are no guarantees you would get this.

Nope, I have MT deals at the moment on Halifax & Lloyds, 3% fee and 0% over 18 months repayments should be 1%.
So it would cost me £300 to float £10,000 for a year and a half paying £100 a month for a minimum.  If my plan was to clear the finance on the sale of a property then that would be cheapest and easiest way for me, without applying for any more credit and being given a high rate.
Barclaycard and HSBC have similar deals but their repayment percentages are 2.25% from memory. 

So what cards has the OP got, any?

Yes that would be a good strategy, but it all hinges on the sale of the flat going through as planned within the next 18months. 

As I understand it, the flat was originally planned to be sold before the end of the PCP. It certainly is an option, but one that may become much more expensive if things don't go to plan. 

With a loan at 3% over 48months that would cost £624. But if they were to settle after just 12months then it would cost around £295. You would have early settlement fees of around £40 I think, but I understand there are ways to reduce this (partial payment first, then settle). 

So given the cost difference is very small, and it has much less risk should the flat not sell as planned, I stand by my advice that a loan is best on the basis it can be had for a low rate of ~3% APR. If not, then perhaps MT is the way forward. 

On_my_way

Why are you asking if you are so dead-cert that you are doing the right thing?

[Deleted User]

Im in exactly the same position. I have a very rare Rose Quartz BMW - very low mileage. I have no intention of throwing it back - its a car thats been cared for since new. I owe about £15.5 k 

I plan to look around at Tesco / bank loan etc. Ive actually got the cash to pay it off but interest rates are so low, and I like having money in the bank and paying off the loan according to the schedule 

redux

I'm with the folks saying lean towards loan for most or all of it.

The best interest rates seem to be for loans in the range £7500 to £15k, sometimes a bit higher, so it's probably not worth having less. You can apply for £7500 and pay back a chunk at the start, if that suits.

Having a money transfer card as well may or may not be worth it, depending on how plans change in the next year or two. If it ends up being for only a year, then the usual 3% fee is only the same as loan interest for the year. If things change towards having an arrangement for 3 or 4 years, this isn't long enough on its own.

Coveredinbees!!!!

What about Zopa, you can pay them back early without any charges.